WHERE ARE THE WOMEN? GENDER,LABOR, AND DISCOURSE IN THE NOIDA EXPORT PROCESSING ZONE AND DELHI

Abstract

Export processing zones (EPZs) are like islands of globalization. Much of the literature on EPZs and export-oriented industries (EOIs) notes a preponderance of women who are constructed as “cheap,” “nimble fingered,” and “docile” labor. This literature is dominated by socialist feminist thinkers, and this paper argues that there is a need to incorporate the insights of postmodern feminist thinkers. The article focuses on the role that language, discourse, and subjectivity play in the gendering process in handmade jewelry production in the Noida Export Processing Zone (NEPZ) and in the ranch production units related by common ownership in Delhi, India. It thus gives “voices” to women and men, and brings out their agency in structuring the labor market. The study confirms that gender division of labor is a product of discursive and material practices that are reproduced through discourses into which different actors invest, and that feed into the gendered subjective identities of these actors.     

IS IT WHERE YOU GO OR WHAT YOU STUDY? THE RELATIVE INFLUENCE OF COLLEGE SELECTIVITY AND COLLEGE MAJOR ON EARNINGS

All college students must decide where to attend college and what major to study. We estimate how earnings by college major differ at different college selectivity types. We find major‐specific earnings vary markedly by college selectivity, with the strongest differences among business majors and the weakest differences among science majors. We also find that when comparing earnings of graduates from top colleges to middle or bottom ranked colleges, the distribution of students across majors can be as important as earnings differences by major in accounting for college selectivity earnings gaps. (JEL I2, J3)     

IS IT IS OR IS IT AIN'T MY OBLIGATION? REGIONAL DEBT IN A FISCAL FEDERATION*

This article studies the repayment of regional debt in a multiregion economy with a central authority: Who pays the obligation issued by a region? With commitment, the central government will use its economy‐wide taxation power in support of its objective to smooth distortionary taxes and consumption across regions. Absent commitment, this tool of the central government may be exploited to induce it to bail out regional government deficits. We characterize the conditions under which bailouts occur and their welfare implications. In particular, we show when the gains from a federation may outweigh the welfare costs of a bailout. We use these insights to comment on actual fiscal relations in three quite different federations: the United States, the European Union, and Argentina.     

IS THE EXCLUSIONARY RULE WORTHWHILE?

In the U.S. criminal courts must throw out improperly obtained evidence. A key justification for this practice is that it is that it deters law-enforcement misconduct. This paper uses principal-agent theory to suggest that, contrary to economic and other conventional wisdom, if the exclusionary rule is flawed it is because it deters inadequately rather than excessively. Principles of an optimal compensation scheme for law-enforcement personnel are offered along with evidence suggesting that actual compensation does not reflect them. The rule may thus fail to sufficiently prevent misconduct even as it increases the costs from lost convictions. (JEL K14, K42, D82)     

ENTREPRENEURSHIP OVER THE LIFE CYCLE: WHERE ARE THE YOUNG ENTREPRENEURS?

Most individuals do not start a business and, if they do, they start well into their 30s. To explain these stylized facts, I estimate a dynamic Roy model with experience accumulation, risk aversion, and imperfect information about ability using the Panel Study of Income Dynamics. Information frictions and income risk reduce entrepreneurship by up to 40% and 35%, respectively. Entry costs and information frictions explain most of the delayed entry. Results from counterfactual policies targeting delayed entry suggest that entrepreneurship education can yield higher returns than subsidies. Fostering young entrepreneurship yields higher returns than fostering old entrepreneurship.     

SHOULD A MANDATORY SUBORDINATED DEBT POLICY BE INTRODUCED IN THE UNITED KINGDOM? EVIDENCE FROM THE ISSUANCE ACTIVITY OF BANKS AND BUILDING SOCIETIES

Current research is beginning to question the role and effectiveness of traditional rules‐based bank regulatory oversight in favor of incentive‐compatible regulatory design and market discipline and, in particular, mandatory subordinated debt market discipline. However, research on the suitability of a mandatory subordinated debt policy (MSNDP) has focused primarily on the United States. The primary aims of this article, therefore, are to examine the market for subordinated debt (SND) issued by UK credit institutions and to assess the suitability of introducing an MSNDP into UK banking regulation. A further contribution of this article is that it explores SND issuance and its characteristics at a bank level and, uniquely, considers them in relation to regulatory, structural, and economic events that either are specific to the UK or otherwise affect international banks. The article compares the UK findings with research on SND markets in the United States and Europe and, in so doing, raises concerns over whether an MSNDP for the largest global credit institutions would be feasible. Although the focus of this study is the UK banking industry, the country‐focused bank‐level approach provides conclusions that might be relevant to other countries considering the implementation of an MSNDP.(JEL G18, G28)     

ENTREPRENEURSHIP AND INCOME DISTRIBUTION DYNAMICS: WHY IS THE INCOME SHARE OF TOP INCOME EARNERS ACYCLICAL OVER THE BUSINESS CYCLE?

In the United States, the income share of the top 5% income group is acyclical over the business cycle. This study attempts to explain the cyclical behavior of the income distribution over the business cycle, particularly focusing on the top 5% income earners' share, using a heterogeneous agent model featuring a choice to become an entrepreneur. The model economy successfully reproduces the acyclical behavior of the income share of the top 5%. During expansions, relatively more people become entrepreneurs at the top, which offsets the decline in the income share of the high‐income earners from workers' side.     

VENTURE CAPITAL AND INNOVATION: WHICH IS FIRST?

Policy‐makers typically interpret positive relations between venture capital (VC) investments and innovations as evidence that VC investments stimulate innovation (VC‐first hypothesis). This interpretation is, however, one‐sided because there may be a reverse causality that innovations induce VC investments (innovation‐first hypothesis): an arrival of new technology increases demand for VC. We analyze this causality issue of VC and innovation in the US manufacturing industry using both total factor productivity growth and patent counts as measures of innovation. We find that, consistent with the innovation‐first hypothesis, total factor productivity growth is often positively and significantly related with future VC investment. We find little evidence that supports the VC‐first hypothesis.     

IS THE PHILLIPS CURVE DIFFERENT IN POOR COUNTRIES?

It has been suggested that the Phillips curve (positive output‐inflation correlation) is inverted in poor countries. It is argued here that the truth is more complex. In poor countries temporary supply‐side shocks, for example to agricultural output, induce a negative correlation between prices and output rather than between inflation rates and output. Empirical evidence supports this hypothesis.     

IS THE DEMISE OF M2 GREATLY EXAGGERATED?

The early 1990s in the United States were years of sluggish economic growth alongside a sharply lowered federal funds rate, leading analysts to conclude that monetary policy must have been rendered ineffective by external influences. One previously popular monetary policy indicator not used to analyze the period was real M2, as it was widely considered to have been distorted since the early 1980s. This paper argues that it was a serious mistake to ignore M2 in the early 1990s since it never forecast (relatively or absolutely) better and helps explains this otherwise puzzling period very well. (JEL E32, E51, E52)     

IS THERE A CURSE OF RELOCATION? ANALYSING THE CAUSAL LINK BETWEEN OFFSHORING AND THE INNOVATION PERFORMANCE OF (SMALL) FIRMS

We analyse the empirical link between offshoring activities and different dimensions of innovation performance at the firm‐level. In order to identify causal effects running from offshoring to innovation, we use a quasi‐experimental comparison group approach by means of (conditional) difference‐in‐difference estimations applied to German establishment‐level data for firms that conducted offshoring activities in the period 2007–13. We find that the international relocation of business functions has a negative impact on the firms’ propensity to be innovative in terms of product and process innovations as well as product improvements. While for larger firms the reduction in process innovations is most striking, potentially due to a lack of resources, stagnation in expertise and a reduction in intra‐organizational learning‐by‐doing associated with the relocation of some business activities, for small and medium‐sized enterprises we particularly observe a reduction in product innovations after the offshoring activity has taken place. When interpreting this ‘pessimistic’ picture on the link between offshoring and the innovation performance of firms, the reader should note that our findings for German establishments have to be assessed through the lens of a global economy in economic recession after 2008, which may have intensified the negative impact of offshoring on the firms’ innovation performance.     

U.S. EXTERNAL ADJUSTMENT: IS IT DISORDERLY? IS IT UNIQUE? WILL IT DISRUPT THE REST OF THE WORLD?

This article focuses on the historical experience with U.S. external adjustment, that is, narrowings of the trade deficit. Using data from the past 35 years, we compare economic performance in episodes during which the U.S. trade balance declined against episodes during which it rose. We find that trade balance adjustment has been generally benign: U.S. real gross domestic product growth tended to fall but not to a statistically significant extent; housing construction slumped; inflation generally rose modestly; and although nominal interest rates tended to rise, real interest rates fell. The article then compares these outcomes to those in foreign industrial economies. We find that the economic performance of the United States during periods of external adjustment is remarkably similar to the foreign experience. Finally, we also examine the performance of the foreign industrial economies during the periods when the U.S. trade deficit widened and narrowed. Contrary to concerns that U.S. adjustment will prove injurious to foreign economies, our analysis suggests that the foreign economies fared reasonably well during past periods when the U.S. trade deficit narrowed. ( JEL F32, F41)     

WHAT DO VARS TELL US ABOUT THE IMPACT OF A CREDIT SUPPLY SHOCK?

In the aftermath of the recent financial crisis, a variety of structural vector autoregression (VAR) models have been proposed to identify credit supply shocks. Using a Monte Carlo experiment, we show that the performance of these models can vary substantially, with some identification schemes producing particularly misleading results. When applied to U.S. data, the estimates from the best performing VAR models indicate, on average, that credit supply shocks that raise spreads by 10 basis points reduce GDP growth and inflation by 1% after one year. These shocks were important during the Great Recession, accounting for about half the decline in GDP growth.     

ON THE IMPACT OF PUBLIC DEBT ON ECONOMIC GROWTH: DOES COUNTRY RISK MATTER?

This study examines the nonlinear impacts of four country risk indices on the debt‐growth nexus for 61 countries in a panel data framework. Our results show evidence of the different debt‐growth nexus under the different degrees of country risk. Under a high‐risk environment, a country's economic growth is harmed by raising its public debt. The negative effects public debt has on economic growth become weak under low political and financial‐risk environments, while an increase in public debt could help to stimulate economic growth under low composite and economic risk environments. In addition, the differences of countries' income and debt levels also lead country risks to have different effects on the debt‐growth nexus, suggesting that a country should borrow appropriately based on its current risk environments while improving economic performance. (JEL C33, E02, H63, O43)     

WHEN IS A GOOD TIME TO RAISE THE MINIMUM WAGE?

I analyze changes in the target efficiency of the federal minimum wage over the past 25 years. Using static simulation methods I find that minimum wage target efficiency is currently close to its 25‐year peak—of the total monetary benefits generated by a 12% increase in the federal minimum wage, 16.8% would flow to workers in poverty. This exceeds the least target efficient year over this period by 4.7 percentage points and is only 0.6 percentage points below the peak. Furthermore, I find a very strong positive relationship between minimum wage target efficiency and the real federal minimum wage. The implication is that, from an efficiency standpoint, a good time to raise the minimum wage is when it is already high. This discovery raises the possibility that the minimum wage increases the employment of low‐skilled poor individuals relative to the employment of low‐skilled non‐poor individuals. Moreover, this discovery may bolster the rationale for an indexed minimum wage whereby it is prevented from falling to less efficient levels. (JEL J21, J31, J38)     

INSTITUTIONAL CHANGES NOW AND BENEFITS TOMORROW: HOW SOON IS TOMORROW?

This paper investigates the timing of the impact of changes in checks and balances on macroeconomic efficiency in a panel of countries. Using Battese and Coelli's one-stage approach, we find that increasing checks and balances results in greater efficiency. Furthermore, the impact of institutional changes on efficiency is delayed, with a full effect showing after five to six years. This finding remains robust after distinguishing developed and developing countries, including country-fixed effects and using alternative functional forms of the production frontier and alternative measures of checks and balances. The relation is also robust to controlling for endogeneity.     

IS ASIA RESPONSIBLE FOR EXCHANGE RATE MISALIGNMENTS WITHIN THE G20?

Abstract.   We use a panel data methodology to derive a consistent set of both real effective and bilateral exchange rate misalignments for the G20 currencies. As far as Asia is concerned, two conclusions can be drawn. First, according to our estimations, the five Asian countries in the sample had strongly undervalued currencies at the beginning of 2006. Second, a lack of exchange rate adjustment in Asia has limited impact on other misalignments against the US dollar. Indeed, bilateral misalignments between the USA and any other country mainly depend on real effective misalignments of both countries.